Entry barriers are like giant walls or moats that stop new businesses from jumping into a market. Imagine trying to join a super-exclusive club but the bouncer just won't let you in. That's what these barriers do to businesses. They come in three flavors:

• State-created barriers
• Firm-created barriers
• Natural barriers

Think of these as government-approved shields that protect existing businesses.

• Patents: Imagine inventing a mind-blowing new gadget. A patent gives you the sole right to make and sell it for 20 years. It's like building a fort around your invention. For example, pharmaceutical companies get patents for new drugs they invent, keeping competitors at bay. But be careful, the law can sometimes be tricky!

• Licenses: This is like getting an exclusive ticket to the party. Licenses are given to radio and TV stations or professionals like doctors and lawyers. It's like making sure only the best chefs cook in a restaurant, but it can also make the food (or in this case, medical and legal services) more expensive!

• Trade Barriers: The government sometimes puts taxes or restrictions on stuff coming from other countries. It's like having a bouncer for the nation's businesses, but it can make things more expensive for us, the buyers.

Here, businesses play defense to keep others out of their territory.

• Keeping Extra Capacity: A business might build a bigger "fort" than they need so they can flood the market if a competitor shows up. Think of it as having extra water balloons ready just in case a water fight breaks out.

• Advertising & Branding: Ever wonder why Coca-Cola ads are everywhere? They're trying to make sure new soda brands find it hard to enter the market.

• Pricing Strategies: Sometimes, businesses price just above the cost so that if a newbie tries to enter, they can lower prices to make it unprofitable.

• Corporate Takeovers: Big companies like Google, Facebook, and Amazon have bought smaller ones to stay dominant. It's like playing a board game and buying all the properties before anyone else can!